Legal fees are generally not deductible. There are two significant exceptions
- Legal fees are deductible if incurred to determine or collect any tax liability.
- Legal fees are deductible if the suit is to secure taxable income
Since wrongful termination is related to securing taxable income, your legal fees are deductible.
To deduct legal fees, you must itemize deductions on Schedule A, and the sum total of your miscellaneous deductions including your legal fees must exceed 2% of your Adjusted Gross Income.
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Type in legal expenses, deduction in the search box, top right of your screen, then click the magnifying glass
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